Monday, August 25, 2008

Power and Powerlessness - The SA Energy Crisis (by Hilary Joffe)

On a dark and stormy morning in January Eskom made a decision that was to have a huge impact on the economy and on the political landscape. It declared an emergency, "force majeure": it told its largest customers that it could not guarantee them power.

It was a decision that resulted in a five-day shut down of South Africa's mining industry, dented investor confidence and put question marks over South Africa's economic growth prospects. Though the power crisis had been building for some time, and is indeed, still with us, that January day was the moment of crisis, the defining moment.

There is a standard explanation that is often heard from Eskom, and from government itself. That is that the government left it too late to give Eskom the go-ahead to start building the power stations South Africa needed, because of its failed venture into privatisation policy before 2004. That "mistake" led to a situation where the reserve margin - the gap between power supply and power demand - became so slim that it left the power system extremely vulnerable to anything going wrong.

This was certainly the context of the January crisis. But what I want to argue this evening is that what happened after 2004 is at least as important in explaining it as anything that happened before then.

For the full speech, which was published on on Friday, 22 August, click here:
Hilary Joffe is senior associate editor of Business Day. This lecture was the seventh annual Ruth First Memorial Lecture, delivered on 18 August

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